That is a good post, Progafa.
I'm not sure the money for Spain was a total waste, because I think it is necessary to get the ore to Panama, and to consolidate the acquisition of San Telmo. However, no question they got accustomed to very high gold prices and spent too freely. Accounting problems are endemic in Spain. I was vice president of a large brewery in Spain way back in the late 1960's and it was a constant hassle.
I support the decision to take care of FQM, but that did cause a problem with DB. IMO that is already resolved. Gold prices are trending back up and production is back to normal.
The immediate question is where do we go from hear. Our operations have always been profitable and will continue to improve rapidly with both gold production and FQM contracts. The question is how do things shake out relative to the relationship with FQM. I rely on the published and filed statements of both entities.
"This first amendment to the Term Sheet contemplates scenarios in which joint developments shall be conducted as agreed to in a Joint Venture Agreement yet to be negotiated and executed by the parties."
I, and others who sometimes post here, have had direct conversation with senior management and directors over the last few months, about our concerns and opinion as to the best way forward. There are several alternatives, some real, some ridiculous, that have been discussed here. Others that have not been discussed. I have no information to which I or any stockholder making the effort to be proactive would not be entitled to be given or understand. But, I am sure you know that if you are on the scene, and involved, you will know much more than those not so engaged. I am a strong supporter of the Chairman.
My gut feeling is that we will see some additional money from loans, a JV with FQM for forward contracts and sales for the development of Cobre-Panama, and perhaps some forward sale of copper for which we have built and expensive flotation circuit to prepare the copper for their use. I am not an advocate for the sale of PDI for various reasons. I believe the brand Petaquilla is very important and will survive.
Shortly we will know the "devil-of-the-details" as they say. I imagine we are deferring news at the moment out of deference to FQM. I am sure you know they will release their P&L's, MD&A in less than 48 hours and then follow up in 12 hours thereafter with a discussion and web cast about their results, and Cobre-Panama status and plans. They are committed to releasing a detail engineering plan and schedule within this quarter.
As to interim predictions, from this point I am not sure. We could go up or down for reasons already discussed on the board. Long term I am very confident in the survival and progress of the company, and expect our family along with others that I know, to be generation-ally invested. I am sure you have a feel for the future potential of mining in Panama. Our group continues to invest using the DCA method, and has only sold occasionally to capture tax losses. Each time we have immediately reinvested when the wash sale rule has run its course.
We only have about 2% of our assets invested and may raise that a little after the first of the year when we have all this turmoil behind us, and we see Q2 reports. I am sure you know there are many, many opportunities for great investments in Panama besides the mining sector. The growth to the west is tripling land values. All the new trade agreements are beneficial to those who use them to advantage.
Saludos,
